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License To Do Harm

Health insurers decide patient’s treatments by approving or denying provider charges for reimbursement. Insurers make harmful and life-threatening decisions overruling doctors, clinical guidelines, and common sense to save money. Consumers rarely appeal denied claims.


Frances Walter was an 85-year-old Wisconsin woman with a shattered left shoulder and an allergy to pain medicine. Security Health Plan, a Medicare Advantage insurer, denied payment for her care telling her to return to her apartment because of a computer algorithm. She lived alone and medical notes showed Walter’s pain was maxing out the scales. She could not dress herself, go to the bathroom, or push a walker without help.

Frances fought the denial. She had to spend her life savings and enroll in Medicaid to get adequate treatment while she waited for a decision from an appeals court. Eventually a federal judge ruled in her favor, chastising the insurer.

Walter died before Christmas last year.


The problem of denials goes beyond Medicare Advantage. Change Healthcare’s 2020 Denials Index showed that 11.1% of claims submitted in Q3 2020 were denied. That is an increase of 23% since 2016.

In-network claim denials by health plans sold on the federal health insurance marketplace were approximately 18% in 2021. Some plans reached denials as high as 80% according to the Centers for Medicare and Medicaid Services.

This volume of denials indicates many Walter tragedies happen.


Both commercial and government health insurers do harm to consumers, and healthcare providers by denying claims. Instead, insurers need to be underwriters of financial risk. These insurers would be better off underwriting risk with well-defined coverage.

As an example, when an insured house is destroyed, insurers cannot tell you can live with less square footage. Therefore, they will only reimburse the “needed” square footage. Home insurance has clear coverage language which follows industry conventions and denials are rare.


Healthcare providers should make the decisions on treating patients and be held responsible for meeting agreed upon standards of care.

Patients should freely choose their medical provider based on convenience, quality and price and not be restricted to proprietary networks. Patients should have full transparency on pricing and be held responsible for paying out of pocket for costs above allowable prices.

This is a first of a series of short blog posts where I will expand on a proposal for a bold new direction for the healthcare market. Stay tuned.



· Article in “Stat” (by Casey Ross and Bob Herman).


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